Aviva plc announces that it plans to build a leadership position in the Russian life insurance market, aiming to achieve a 10% market share and a top five market position within the next five years.
Aviva plc (“Aviva”) announces that it plans to build a leadership position in the Russian life insurance market, aiming to achieve a 10% market share and a top five market position within the next five years.
Aviva aims to become a major player in Russia by offering a range of long-term savings and protection products through a multi-distribution approach. It has just written its first policies in the corporate market which include group life, accident and sickness policies, having received its licence to operate in March 2006.
There are a number of factors that make the Russian market attractive, including regulatory reforms, steady economic growth and a growing middle-class, which is becoming increasingly wealthy and financially sophisticated. Additionally, there is increasing penetration of life insurance and protection products – from a very low base of around 0.05% of GDP. All of these factors combine to make Russia a potentially important market for Aviva in the long-term.
Russia is Europe’s most populous country with more than 140 million people. In the last three years, Russia’s nominal GDP has doubled to US$766bn or US$5,364 per head and strong growth is projected in the short to medium term.
Aviva Russia will draw from Aviva’s worldwide experience, leveraging the knowledge and expertise gained by Aviva businesses around the world, including the emerging markets of Asia and Central and Eastern Europe.
The local team has extensive knowledge of the Russian insurance market and will initially develop the business from the head office in Moscow and then subsequently expand to other areas of Russia in due course.
Philip Scott, executive director, Aviva international said, “Our strategy is to position Aviva to take advantage of the rapid growth that will occur in the transition to a developed life insurance industry. We aim to achieve at least a top-five market position and a 10% share in the life insurance market in the next five years.”
Commenting on the beginning of trading, Philip Scott said: “We are delighted to have started trading so soon after the licence was granted for us to operate in Russia. Our local team is making an excellent start in the Russian market and this is an important milestone for Aviva.”
-ends-
Enquiries:
Analysts
Charles Barrows, investor relations director +44 (0)20 7662 8115
Jessie Burrows, head of investor relations +44 (0)20 7662 2111
Nicole Marques, investor relations manager +44 (0)20 7662 8302
Media
Hayley Stimpson, director of external affairs +44 (0)20 7662 7544
Rob Bailhache, Financial Dynamics +44 (0)20 7269 7200
Notes to editors:
Russia statistics:
- Population: almost 143 million people. There are 14 Russian cities which all have in excess of one million inhabitants.
- 2005 GDP: US$766bn.
- Economy: Russia is the world’s 10th largest economy measured using the purchasing power parity method.
- Foreign direct investment totalled US$26bn in 2005, ranking Russia third among the world’s emerging markets.
- Penetration of long-term savings products: about 0.05% of GDP (as at 31 December 2005).
- Adult literacy: 99.6% - making Russia one of the Europe’s best-educated states.
- Recent regulatory reform means that European insurers can now own 100% of a life business in Russia.
- A photograph of Philip Scott in Russia is available at www.aviva.com/media
- Aviva is the world’s sixth-largest insurance group based on gross world-wide premiums and market capitalisation (at 31 December 2004); it is one of the leading providers of life and pensions in Europe and has substantial businesses in other markets around the world.
- Aviva’s principal business activities are long-term savings, fund management and general insurance, with worldwide total sales of Ł35 billion and assets under management of Ł317 billion at 31 December 2005.